Avoid a Surprise!

The weather has finally cooled down.  The trees are showing color.  Tax Season for 2016 is official (and finally) over.  Therefore, it must be fall!

Each filing season brings to light some common misunderstandings.

Let’s take a look at a few.

  1. How many extensions can I file?
    Just one for both individuals and businesses.  Several years ago you could file two extensions.  The first extension gave you until June 15th to file and the second extension to September 15th for businesses.  For Individuals it was June 15th and October 15th.  The IRS eliminated the June 15th extension and went to an automate six month extension.  This is part of the paperwork reduction act, I suspect.
  2. What does an extension mean?
    It allows the business or individual extra time to file the return.  However, it does not allow extra time to pay.  This is a key point and misunderstood by many.  Any amount due has to be paid by the first due date.
  3. If I don’t file my return how do I know how much I owe?
    Reasonable estimates can be made that should get most taxpayers close to the actual amount.  Most of the time, if 90% of the previous year’s total tax is paid, than there is not a failure to pay penalty on amounts owed.  There will be interest on the amount owed, but the interest rate is rather low (around 4% or 5% percent).
  4. What if I do not have the money to pay? Can I wait to file my return until I do have the money?
    The return should be filed on time whether the taxes can be paid or not.  There are various penalties and one is a failure to file penalty.  Therefore, it is not a good idea to hold up the return.  If there is not any money to pay the taxes, an installment arrangement can be set-up after the return is processed.  After the return is processed a letter will be sent with the amount due.  An application for the installment arrangement can be obtained by calling the telephone number in the letter or online at www.irs.gov.
  5. Will I get audited if I file an extension?
    Audits are pulled on a random basis and have more to do with difference in line items from year to year than the date you filed.

Before long tax season will begin again.  Do your planning now and know the facts in order to be prepared for next year’s filing season.  But, save some time to enjoy the fall.

For questions about your tax return or to plan for 2017, contact our office today.

Avoid Becoming a Victim of Identity Theft

Several years ago I began receiving rejection letters in the mail from credit card companies that for cards I had not applied.  I immediately became very concerned and started to make calls to the credit bureaus.  It didn’t take long to discover my identity had been stolen and someone was opening accounts and making large purchases in my name.

It took more than six months and many letters and phone calls to get this cleared up.  One of the stores even had video footage of the people using a card with my name and still did not believe it wasn’t me.

Identity theft can happen to anyone.  The following are some guidelines to help avoid becoming a victim of identity fraud. If you have already become a victim, see our Tips for Victims.

• Beware of Fake IRS E-Mails –
the IRS does not initiate communication with taxpayers through e-mail and only or extremely rare occasions to they call.

• Don’t carry a Social Security Card
, extra credit cards or a passport unless the documents are needed.

• Memorize your Social Security Number
, any personal identification numbers and passwords. If you write them down, do not record them on anything in your wallet or purse. When creating a password or PIN, do not use digits from your Social Security number, telephone number or date of birth.

• Sign new credit cards upon receipt.
 Save all credit card receipts and match them against your monthly bills. Never throw them away intact in a public trash container.

• Never loan out your credit card.
 Report lost or stolen credit cards immediately.

• Never give out personal identity information, especially Social Security or credit card numbers over the phone, unless you know the person or business and you initiated the phone call.

• Beware of phone or mail solicitations
 disguised as promotions offering prizes or bargains designed solely to obtain your Social Security or credit card numbers.

• Don’t leave mail out for pickup
 and do have a locked mailbox. Promptly remove mail from your mailbox after delivery.

• Shred all mail, bills, receipts and financial documents
 with your name or identification numbers on them, especially pre-approved offers of credit. Thieves have been known to fish identities out of trash bins.

• Look over monthly credit card and bank statements carefully.
 Follow up if any charges or withdrawals appear suspicious.

• Order credit reports from the three major credit bureaus at least once a year
 and more often if you have been a victim. Check every line of information in your file for fraudulent activity and other discrepancies.

• Pay bills electronically when possible.
 Follow up with creditors if you do not receive a bill on time because it could mean an identity thief has taken over your account and has changed the billing address.

• Remove your name from the marketing lists
 of the three major credit reporting bureaus to limit the pre-approved offers of credit you receive.

• Keep the number of credit cards you use to a bare minimum.
Cancel all unused credit card accounts.

Even with these precautions you can still be a victim.  However,  minimizing the information someone can still will improve your chances.

How and Accounting Pro Can Help Your Small Business Boom

One of the most positive qualities that many small business owners share is a burning desire – an insatiable willingness – to “do it all.” It’s what separates entrepreneurs from employees in the first place. An employee is more than willing to set out on the path that someone else has carved for them. An entrepreneur has a need to carve a path for themselves.

Unfortunately, this mentality can also get even the most passionate small business owners into a bit of trouble – particularly when it comes to their finances. Being able to balance your own checkbook and running the finances of a small business are NOT the same thing, nor should they ever be treated as such. To that end, the importance of finding the right accounting professional to help support your small business as it continues to grow and evolve cannot be overstated enough.

There are a number of essential ways, in particular, that an accounting expert can help your small business.

When You’re Just Starting Out

Perhaps the most important role that an accounting professional will play in terms of your small business takes place when you’re just starting out. One of the most common mistakes that many business owners make involves selecting the wrong business entity – a small problem that can have major ramifications when tax season rolls around. A accounting pro who is intimately involved with the makeup of your business from a basic level can help make sure this doesn’t happen to you.

Along the same lines, an accounting professional can also help make sure that your accounting system is properly set up in the first place. They can make sure that you’re picking the right accounting system that actually supports your long-term goals for your business and can create a chart of accounts to offer superior visibility into money coming into and out of your organization.

The Day-to-Day Grind

Another one of the hugely invaluable ways that an accounting expert can help your small business comes by the small, yet critical, decisions they make on a daily basis. A financial expert can help give you greater visibility into cash flow (including accounts payable and accounts receivable), for example. Cash flow and other instability issues are one of the major reasons why most small businesses fail in the first place, and having the right person at your side can help you avoid them altogether.

An accounting professional can also help make sure your security controls are properly set up and executed, particularly in terms of factors like compliance. Remember that we’re living in an era where the average cost of a data breach has ballooned to almost $4 million. If the security aspect of your finances is not properly accounted for, it could be putting your entire business at risk. Even one small data breach could expose the personal records of multiple clients, something that opens the door to things like lawsuits, and that could eventually close the door on everything you’ve worked so hard to build.

Other Benefits

A financial professional will also play an important role when it comes to growing your small business. Remember that both an inability to scale up as fast as you need AND growing your business faster than you can sustain are additional reasons why many small businesses fail. Because such a large part of your growth and expansion pace has to do with personal finances, it stands to reason that bringing someone into the fold who can leverage their years of experience to your advantage is a very good idea.

A financial expert can help you raise money – particularly helpful if you’re getting ready to bring a new product or service to market. If you ever decide that this chapter of your life is closed and that it’s time to look for new opportunities, these professionals can also help sell your small business as well. Selling a business is a process filled with potential mistakes just waiting to happen, and the expert hand of someone who has been in this position before is something that you literally cannot put a price on. It isn’t just an investment in your organizational ability – it’s an investment in the future of your business as a whole.

In the End

The fact of the matter is that there really is no “one size fits all” approach to small business accounting. Every business is a little bit different, which will require a certain level of care and finesse when it comes to finances in particular. Only by consulting the help of a professional as early on in the process as possible will you be able to avoid the normal pitfalls of running a small business and create a financially stable foundation from which to work.

If you are considering starting a new business, it may be appropriate to consult with this office before you get too far through the process. Please call for assistance.

Lessons Learned the Hard Way

Ever since my children began to drive I gave them some of the same advice that my dad gave me. One was to never to bring the car home empty and always fill up when the tank was about a quarter full. Recently, my daughter (and I hope she doesn’t see this) ran out of gas on the interstate. And as she sat there for nearly two hours waiting for the roadside assistance truck to pull up, those words of advice ran through her head. When she got home I ask her if she thought she would wait until the gas light came on again before getting gas.  Her answer was that she had, unfortunately, learned her lesson the hard way.

I would think at my age that I wouldn’t have to learn lessons the hard way.  But, recently I too have had to learn something the hard way. Hopefully, these suggestions below might prevent someone else from having to learn this lesson the hard way.

Almost 5 years ago had a disagreement with a company. I believe I went above and beyond what would be considered normal to resolve the issue. However, no resolution seemed to be forthcoming. I informed the company what my position was and what my actions were going to be. Obtaining no objection, I followed through on what I stated I was going to do. Now, five years later, they are approaching me again.

Here are four suggestions:

  1. Document. Document – With any business transaction, there is no such thing as not enough documentation. Documentation should contain the party or parties that were present, what was discussed, the date, and the time.  In my case, I actually went to this company’s office and documented where those offices were located, who I spoke to, as well as the date and time that I was there. I also documented what the next steps were to be at the end of that conversation.
  2. Rewrite Your Notes – Taking notes during a conversation can be difficult. Taking the time after the meeting while the conversation is fresh to rewrite the notes can help insure that all the important points are covered.  If there are some items that are unclear, don’t hesitate to speak with your contact and get it cleared up.
  3. Stay Organized – Keep the notes in a chronological order. If documentation such as forms, logs and agreements were discussed, insert a copy of those documents in the notes where they were discussed. This way they can be easily retrieved when necessary.
  4. Save. Save – if documentation is a key component, then so is saving. Your documentation should be saved at least until the statute of limitations has expired, which is usually seven years. This is the mistake I made. After about three years, I had not heard anything, so I assumed that this matter was over and I destroyed my documentation. Now, five years later, I’m scrambling to try and remember and piece together the sequence of events. With digital storage and the cloud, there is no reason not to save this information in a form that takes little space, is easy to retrieve, and can be kept for an adequate amount of time.

Unfortunately, I guess we all learn things the hard way from time to time.  But for me, I won’t get caught by this one again.

You Have Never Asked for That………..

There are days, usually on Mondays, that I would really like everything to standstill for just a little while.

However, that just does not happen.

Everything seems to be in a constant state of flux.  Unfortunately, the Income Tax system is a good example of that constant change.  At least, it seems that way to me as I deal with it from year-to-year.

This year appears to be no exception for changes. While there are not too many changes to the actual tax laws there is a great many changes to the documentation that is being required. The Internal Revenue Service is putting an emphasis on security and deduction verification this year.  Therefore, we will be asking for things we never asked for before such as a copy of an individual’s driver’s license or a copy of their Social Security card. This year will be asking for those things because we are being required to prove people’s identity.  We cannot file a return without the driver’s license number.

In addition to documenting people’s identity we are also being required to document the existence of children. Therefore, if the taxpayer qualifies for a child tax credit, we are now required to ask for proof of the child’s existence such as copies of school records, healthcare provider records, etc. This one really drives me crazy. I’ve been in business for 15 years and some of these kids I know.  They have come in with you at times when you’ve come to ask questions or pick up your tax return. Therefore, I know they exist, but I still have to ask the questions and document the answers.

For dependents that are in college, depending on the information that we receive, we may have to do additional verification for them as well.  If a tuition tax credit is being claimed, that information cannot even be entered if we do not have the 1098 – T.

I can only imagine how annoying this seems to the taxpayer. It places an additional burden on the tax preparer and we are subject to penalties and fees if we don’t comply with the new documentation standards. And ,as you would expect, all this additional work takes more time and drives up cost.

Hopefully, this will give you a heads up as to what we will be asking this year for documentation. Some folks who showed up early have already said, “You have never asked for that before”.

And they are correct, but we have to ask for it now.  So, please bear with us.

Meet Aneissa!

You may call our office occasionally and may be lucky enough to speak to Aneissa Hyde, so we wanted you to get to know her! Aneissa is our Administrative Support Specialist and we are lucky to have her!

More About Aneissa

Aneissa J. Hyde joined the Angela Lane, CPA team in January 2017 to as an Administrative Support Specialist.  Her position entails assisting the Payroll/Bookkeeping Assistant (Cindy) and the staff Accountant (Bukky).  This includes answering all incoming calls, making inquiries to clients for needed information.  In other words, helping out wherever needed to make us all more efficient.

Previously, Ms. Hyde was the Town Clerk for the Town of East Spencer for 7 years were she wore many hats, from the Office Manager to the Finance Director.  These years of experience has taught her many trades, such as giving excellent customer service, being detail-oriented, and having excellent soft skills.  Her motto is, “its okay to get out of your comfort zone by critical thinking and using problem solving skills”.

Ms. Hyde was born and raised in Salisbury, NC and is graduated of North Carolina Agricultural and Technical State University in Greensboro, NC with a Bachelor of Science in Economics with minor in Business Administration.  She is a mother of 3 sons (Keirsten, Cameron, and Ramsey) and 1 daughter (Madison).  In her free time, she enjoys cooking, traveling, and learning new things.

I’ve learned that fear limits you and your vision. It serves as blinders to what may be just a few steps down the road for you. The journey is valuable, but believing in your talents, your abilities, and your self-worth can empower you to walk down an even brighter path. Transforming fear into freedom – how great is that?                           ~Soledad O’Brien

Plan Your 2016 Taxes Now

The year is quickly coming to an end. However, before getting busy with holiday activities it would be prudent to consider you individual 2016 income tax picture now.  There is still time to make an adjustment or two that could make a difference.

Let’s take a look at a few.

Capital Gains and Losses – If stock has been sold earlier this year or you are considering some moves before year end and these stocks have a gain, review your portfolio and determine if there are any stocks that appear to be permanent losses.  If so consider selling those by the end of the year.  The losses can offset the gains and reduce or eliminate any taxes associated with those stock sales.  However, your financial advisor should be consulted before making any changes.

Pay State and Local Taxes- Most individuals are considered to be cash basis tax payers meaning that all deductions are recognized when the money is spent.  Therefore, paying all state income and local real estate taxes by December 31st would allow the deduction to be recognized in 2016 this includes estimated state income taxes.  For individuals that find it difficult to itemize consider making double property tax payments every other year.  This would allow itemizing every other year if the real estate taxes puts them over the threshold.  Most real estate taxes are due in January anyway so moving those up my help create a larger deduction and reduce the tax liability.

Delay distributions – If you take a retirement distribution in December consider delaying it until January.  That moves income out of 2016 and into 2017.  With the entire year to play with, there might be other things that can be done in 2017 that can minimize that income for 2017.

Premium Tax Credit – The Affordable Care Act (ACA) has been with us for several years now.  Even with all the talk about wishing it to be repealed it has it tentacles in too many places for that.  Instead the conversation should be centered on how to fix it.

If you purchased your medical insurance on the exchange you may have received a credit (reduction in premium) due to the income projected. If that amount is now too high there is a good chance you will loose the credit that has been received each month.  Going back to the exchange and adjusting your income will change the amount of credit at least for the last month or two.  If it is too late to make any changes then be prepared to pay some if not all of that credit back with the filing of your tax return.

For taxpayers without minimum essential coverage and do not qualify for an exemption will pay a higher penalty this year. The penalty is $695 for each household member over 18 not to exceed the bronze-level plan for the household size.

All taxpayers will receive a 1095 (-A, – B or –C) this year. That information must be included in with your tax return.  Make sure you receive yours by the end of January and that you put it in your tax documents.

These are just a few ideas. Consulting with your tax specialist for these or other suggestions could save some heart ache in April.


We all know about hiccups. We have all had them. They are sudden, involuntary contractions of the diaphragm muscle. As the muscle contracts repeatedly, the opening between the vocal cords snaps shut to check the inflow of air and makes the hiccup sound. Everyone’s hiccup sound is different but we all know immediately when someone has them.

Businesses’ can have the hiccups, too. The sound is usually a little less audible (but sounds more like a groan) but none the less just as irritating and frustrating as human hiccups. If not reacted to quickly and positively the ramifications can be devastating.

We recently experienced a Hiccup in the business. It came suddenly and involuntarily and it certainly was very unwelcomed. It happened when I was diagnosed with cancer. We were just a few months away from the beginning of our busiest time of year (year end and tax season) and I was facing surgery, recovery from surgery, and then radiation and chemo therapy treatments. I had limited time to prepare.

I had a disaster recovery plan that included what to do for weather, fire, and floods/water damage and for equipment failure but it never occurred to me to plan for the loss of a key player at an inopportune time. Because of my lack of planning work was slow to be completed which caused frustrations through the office and with the clients. We are still not sure what the lasting impact of this hiccup will have on the business but I have learned somethings which might help someone else with their hiccup.

Here are 4 suggestions

  1. Identify and include the loss of key personal to your disaster recovery plan. I once read that a small business owner should always be recruiting. They should be aware of people that they come in contact with every day such as in restaurants and stores and offices and make a note of people they think might make a good employee. Then add this information to a personal data base. When or if the time comes you have an immediate source for help.
  2. Cross train employees. That allows someone to step in the gap at least temporarily until the need is resolved. If there is no one else in the company that can do that position, identify sources where potential replacements can be found and have them in a data base that can be accessed quickly.
  3. OVER ESTIMATE how long your hiccup will last. This was probably my biggest mistake. I was too optimistic about how much I was going to be able to do and how soon I would be pulling my load. I was able to come back to work within a few weeks but was unable to work a full day. I had not anticipated this problem.
  4. If adding temporary help make it the right fit for the company. This was another mistake of mine. I brought in temporary help that fit my budget but didn’t have the appropriate background and training. The plan was to invest time in training. It would have been better to bring in someone that could have hit the ground running. It would have kept the work from piling up, everyone’s frustration from mounting, and disappointing the clients. Even if I had to use temporary funding it would have kept things on an even kill and the fear of potential loss business during this time would not have been as great. A word of caution though; the use of debt to support payroll should only be for a brief period or it will financially impact the business creating a different problem.

It is difficult to plan for every possible business interruption. It seems that something will come along that will always take you by surprise. But adding this to the disaster recovery plan might just stop or shorten a hiccup.

On a personal note: Many of you know that I have been battling cancer. Well, I am happy to report, it looks like I am winning. I am not completely out of the woods yet but I have been stable for about six months now and the last images show a slight improvement.

Thank you all for your support and prayers. However, I ask that you keep up the prayers and positive energy until I am cured.

Oh My Heavens!! Why Does Everything Cost So Much!?

Have you ever been standing at the gas pump and realized that gasoline went up by five cents a gallon overnight and wondered why? Or, standing at the meat counter in the grocery store and thinking, “How did ground beef, the cheapest meat in the store, get to be $7.99 a pound?” Or how new cars cost as much, or more than, a house did many years ago?

When did everything get so expensive?

Sticker shock, I think, is what they call it whenever you look at the price of something and you are surprised by it. I’m certain experts can explain why gasoline prices increase and how beef and cars are so expensive. I am not that expert for those things but I sure understand what is driving up the cost in my small business.

In small businesses like mine, we feel the price pressure of all the things going up around us. In addition to cost of labor and supplies increasing, the things going on in the world around us also are creating costs resulting in price increases.

For instance, cyber security is a big issue now. Several years ago whoever heard of big companies getting hacked and information stolen? But, to protect ourselves and the information we collect from clients, we now have to consider the things we must do to provide protection. I have had to add cyber insurance, a stronger firewall, and software to send more secure email attachments. These things add to my cost of doing business, which unfortunately, I have to pass on in order to stay in business.

Several years ago the Internal Revenue Service implemented a paid preparer penalty. If they pull a return or even a line item on a return and the preparer cannot substantiate the information put on the return, in addition to the taxpayer getting penalized, the preparer does as well. To ensure that I do not get hit with the preparer penalty, I have opted to obtain more information from the taxpayer. This requires more time, more documents to look through, and more cost.

The Affordable Care Act (ACA) has increased our documentation and tax preparation time considerably. There were all kinds of questions regarding Obama Care. This year everyone was supposed to receive a form from the exchange, the health insurance company (if self-insured), or from their employer. Many people did not realize that they should have received a form and there were others that were confused by the form and others that didn’t know what to do with the form. There was a lot of time spent trying to collect, include, and explain this information which resulted in more costs.

I suppose there is no service or product or industry that doesn’t face things changing that result in cost pressures. If the minimum wage increases, as our politicians are proposing, you will see a big jump in prices and probably an increase in unemployment.  But, I’ll save that for another time.  In the meantime, try not to get sticker shocked too often.

We have had some folks with sticker shock too. Our hope is that our clients don’t see these changes as thoughtless or greedy, but instead our way of keeping up with a changing world. Like gasoline, beef, and cars…. costs change for us too and we have to react to them to stay in business and provide excellent service to our most precious commodity…our clients.

Avoid the Holiday Bug

My mom worked as a bookkeeper for the Board of Education in the town I grew up. The Board office would close for the holidays at the same time as the schools.  The accounting department would have to try to complete an entire month of work in two and a half to three weeks.  Between the holiday preparations and the stress at work by the time my mom was off for the holiday she was always sick. 

This is a common occurrence during the holidays for many families which is a shame. We have managed to take a joyous time and turn it into a stress and frantic rush to close the year.  With that in mind I have complied Seven suggestions which will help reduce the stress and should help you to stay relaxed and healthy throughout the holidays. 

  1. Keep Exercising (or start) – Exercise affects many neurotransmitters in your brain which have an antidepressant-like effect on your brain. Not only have these been shown to increase your mood but they also help you to feel energized and reduce stress.
  2. Get Some Fresh Air – Many of us spend the majority of our time inside an office or home. Five minutes outside has shown to reduce stress, boost feelings and induce relaxation. The weather this December has been unusually mild so take advantage of it.
  3. Wash your hands often – It is a dirty world out there. Touching door handles, counter tops, merchandise and then touching faces, nose, and eyes and transfer germs and we become infected. The simple act of washing your hands with warm soap and water can eliminate transferring most of these germs.
  4. Maintain a Vitamin Regiment – A combination of immune boasting vitamins such as Vitamin C, D, and Zinc along with a probiotic just to name a few will help keep a health immune system to fight off anything going around.
  5. Mediate – Your brain is always moving. At times we each have more going on than others depending on the storms that are brewing. Your superficial thoughts or the “got to do…” thoughts that with proper training and some practice you can begin to “go deep” into your own mind and find the inner calm.   Meditation is a great way to bring immense levels of relaxation and in fact, studies show it can lower your cortisol by 30% in as little as 20 min!
  6. Do something fun – Be sure to carve out time for yourself this holiday season. All too often we find ourselves running around for other people (gifts, parties etc.) and not dedicating any of our time for the things we like to do. Find what you love the most about the holidays and do that (caroling, decorating the tree, writing cards, a massage, hot bath etc.)
  7. Use visualization techniques to relax – Close your eyes and imagine yourself relaxing on the beach or sitting in front of a cozy fireplace with your family. You can also visualize your “perfect” holiday, which is especially useful if you’re worrying over what might go wrong. Although, letting go of the holiday for a while and transporting your mind somewhere else can do wonders.

Continuing IRS Impersonation Scam

In the past we have published other information concerning the scam where the telephone caller is impersonating an IRS agent and demanding money to be sent for back taxes. As the general public becomes more informed about various IRS scams, the scammers are becoming more creative, bold and threatening.  

The U.S. Treasury Department released a statement in October announcing that they are making progress. In the past y ear they have been successful in prosecution of some individuals over the past year.  The inspector general, General J. Russell George stated that this summer a ringleader was sentenced for than 14 years in federal prison.  However, there are still thousands of contacts each month to individuals claiming to be IRS agents and demanding money. 

Some of these scams hit close to home. One of our clients recently called us telling us about the threating and disconcerting call she received.  The caller knew some personal information.  According to the Inspector General it is possible for them to know the last four of your social security number, they might actual give you an IRS agent badge number, can make caller ID appear as if it is from the IRS, and can send bogus emails to support their scam.  During this telephone call the scammer demanded that she go to the bank immediately and transfer money to avoid having their business and personal accounts levied and/or immediate arrest.  The client managed to stall long enough to drive to the sheriff’s department and hand the telephone to the officer.  While this may have worked in this particular situation there are other recommended actions issued by the Inspector General.  

Here is a list of five things to consider. 

  1. The IRS does not call taxpayers.   They do everything through the U. S. postal service. If you receive a call from someone claiming to be an IRS agent hang up even if they have some personal information that makes them sound legit. It is best not to engage in any conversation with them.
  2. If you get a call claiming you owe money and you think you might, hang up and call 800-829-1040. An IRS agent will help you with payment questions.
  3. If you don’t owe taxes, fill out the IRS Impersonation scam form on TGTA’s website, www.treasury.gove/tigta.
  4. The IRS never asks for personal information by e-mail, text, or any form of social media. You should forward emails to phishing@irs.gov. DO not open any attachments.
  5. Be aware of other unrelated scams such as lottery sweepstakes winners and solicitations such as debt relief that claim to be from the IRS.

 It pays to be suspicious of any calls demanding immediate payment. If you have questions or concerns about any dealings with the IRS it is best to call them directly.  You might have to wait awhile to reach an agent but then it might be worth it if it saves you from getting scammed.

Disaster Recovery Plans

This time of year, especially during an active hurricane season, there are usually lots of postings concerning disaster recovery plans. However, even with our recent encounter with Joaquin things have been rather quiet.  But fall is a good time to pull out, review and update, if necessary, a company disaster recover plan.

Webster’s dictionary defines a disaster as “something that happens suddenly and causes much suffering and loss to many people.” The goal than for any disaster recovery plan would be to minimize the loss and suffering.

I think of these plans needing to cover three areas.  The first, are environmental occurrences such as hurricanes, rain, flooding, etc. or from fire or structure damage.  The second in my mind is technology which can encompass equipment failure or cyber attack’s.  Lastly, human or personal factors which could mean loss of key personnel due to any life issues such as illness or injury or just temporary issues that take away or distract from work.

Planning for environmental disasters might be the easiest to plan for of the three because running various what if’s based off different scenario’s can produce a plan that can quickly be implemented.  The idea being that if the building burned down or was flooded, etc. what would need to be done to become operational again.  For us we have taken several steps to allow us to be up and operational in hours.  Some of these may be beneficial for you to consider as well.

  1. Go paperless – most all of our documentation now resides in an electronic version. Only the current projects are still in hard copy and they would be easy enough to protect and secure for a pending weather related disaster.
  2. Backup daily – since we are mostly paperless we have an automatic backup process that occurs daily. If need be we can switch the protocol to hourly.
  3. Secure a remote data site – locate and contract with a data site that would let you download programs and files to their servers on a daily or weekly contract basis until such time your site is operational again.
  4. Consider moving to the cloud. – I’m still a little uncertain about moving all of my data to a third party. However, if this was done finding a data center would not be necessary.

Technology and equipment failure can mean different things to different businesses.  For us it means computers and servers and we can have those replaced and installed within days.  However, if you manufacture and have a major piece of production equipment planning for a backup piece of equipment and/or processor may take some searching.  The idea, however, would be to have a contractor that would process your product temporarily until such time as the equipment is repaired or replaced. 

The personal factor has become quite real to us recently and so far I am pleased that the things we prepared for have been working. 

  1. Train, Train, Train – Look at all staff members as part of a team. While each one may have a primary job assignment they should be able to step in in at anytime and take over other assignments.
  2. Temporary Employees – If there is a particular task or job function that just can not be covered by someone else find an associate that can be called in on a temporary basis. This will take some effort to find but use your contacts and network to locate possible individuals.
  3. Recruit Constantly – Where ever you go and who ever you speak with be interviewing them as possible employees for your company. You never know when you will need to fill a vacancy and having potential candidates already in mind will make this transition process go faster and smoother.
  4. Be able to work from anywhere – This may look differently for different businesses but with technology it is possible to conduct a lot of business from a home office or on the road if planned properly.

I hope these brief suggestions will help get you thinking and prompt you to dust off your own disaster recovery plan to minimize your own personal loss and suffering.

I’m Not an Electrician

I pride myself in being able to take care of most things around the house. I’ve unclogged drains, replaced the insides of a toilet, hung shelves in the garage etc. I own some power tools and I know how to use a hammer and screwdriver. My older sister, who would have been a good engineer, can do even more than I can. In true sibling rivalry form, I attempt things with the help of YouTube that I shouldn’t but do just so I’m not out done. 

I had a lamp that wasn’t working any longer. I determined that it was the socket that was bad. With the help of YouTube, I proceeded to change the socket out on it.   I’m happy to report that the lamp will turn on and there are no sparks coming from it. However, it will not fit back into the housing properly. It is a little loose and wobbles a bit when turned on. I tried replacing another socket on another lamp and it wobbles too but this time when I turned it on sparks flew every where.   I’m lucky I didn’t turn out like one of those cartoon characters with my hair frizzed and fried. After that I gave up on attempting any electrical work. I’ll call an electrician in the future. I decided I better stick with what I know and not burn the house down. 

I think of this experience often when people bring in there self-prepared Turbo Tax returns or their QuickBooks. They both kind of look like my lamp. They sort of work but aren’t quite what they should be. 

I’m not saying that people can’t prepare an accurate return with Turbo Tax or prepare accurate accounting records with QuickBooks. But it’s like my electrical work. Without some knowledge and/or understanding behind what you are trying to do it doesn’t take long to get into deep trouble. 

Recently, a person came to my office looking for help. He had prepared his return on Turbo Tax and was now being audited. Some of the deductions he had taken were being declined. His question to me was why Turbo Tax had asked him the question about such deductions if he couldn’t use them. 

I don’t know for sure because I don’t use Turbo Tax but my guess is that the questions are there to help prompt the preparer. A memory clue. However, the assumption behind the question is that the preparer knows that piece of tax law that would allow him/her to determine if that is a deduction that can be used. While the mechanics are there for a person to prepare a return, the knowledge base is assumed. 

We see all kinds of issues with small businesses that use QuickBooks as well. QuickBooks is a true accounting package. However, it is designed for a user with limited accounting knowledge. It performs many functions in the background and without a basic knowledge of accounting or bookkeeping the user can get in deep trouble. We just finished cleaning up an entire years’ worth of information. The basics were there. Checks were recorded in the check register and so were the deposits. However, the income was doubled and some things were labeled as expenses that were really something else. 

Redoing the entire year was twice as expensive as it would have been if done right the first time.   A relationship with a bookkeeper and/or accountant that could have assisted along the way would have saved a lot of money and time. And our Turbo Tax preparer? He will owe about $40,000 ($20,000 for two years that were audited) back to the federal and state government by the time all the interest and penalties are included. 

Just like these individuals, I really didn’t save myself any money. I still had to go out and buy a new lamp or pay someone else to fix my mess. But I also had the parts and my time I spent added to the repair. I’m lucky I had not started a fire. Then the expense would have been much greater. Yes, I have wire and a screw driver and some electrical parts but it still doesn’t make me an electrician.    

Use Tax – What’s This?

We are all familiar with sales tax. When buying groceries, household items, clothing, etc. the cash register automatically calculates the correct amount of sales tax for the items we have purchased. Nothing new there, right. If you examine your receipts closely you might notice multiple rates on some receipts such as some items taxed at the normal state and county rate and some taxed at a lower rate. In North Carolina usually that is 2% for certain food items. However, many people are unfamiliar with Use Tax. 

Since all governments are looking for revenue to reduce their budget deficient there is much more auditing occurring around Use Tax. Therefore, it is important to become familiar with the laws concerning this tax. 

Use Tax is a different side to the Sales Tax coin. Simply put Use Tax is “sales tax” on out-of-state purchases to be used in-state. Common items on which use tax may not have been collected and where use tax may be due by the purchaser include, but are not limited to: 

  • Tangible personal property such as,
    • Computers and other electronic equipment;
    • Home furnishings;
    • Clothing;
    • Jewelry;
    • Sporting goods;
    • Audio compact discs (CDs), tapes, and records.
  • Digital property, which includes the following when delivered or accessed electronically:
    • An audio work. Examples include, ringtones, digital music, readings of books or other written materials, speeches, and other sound recordings.
    • An audio visual work. Such as movies, motion pictures, musical videos, news and entertainment programs, and live events.
    • A book, magazine, newspaper, newsletter, report, or another publication.
    • A photograph or a greeting card.
  • Prewritten software including electronic downloads of software.
  • Purchases of or recharges of prepaid telephone calling cards and phones.
  • Service contracts to maintain or repair tangible personal property or a motor vehicle.
  • Admission tickets to an entertainment activity purchased outside the State where admission to the activity may be gained in the State.

 These rules apply whether the merchandise was purchased directly or indirectly through the internet. 

For Individuals in North Carolina for out-of-state purchases consumed in-state Use Tax should be calculated and reported on the annual State Income Tax Return, D-400. 

For Businesses in North Carolina their out-of-state purchases should be reported on the Form E-500. However, before making this calculation, businesses should determine if they are the end user. Typically, businesses calculate Use Tax on purchases that they are going to use in the business which they were not charged sales tax on and not resale to customers. If reselling the item to customers, the end user, than they should be collecting and remitting sales taxes. 

If you would like more information about this tax you can find it a www.dornc.com. Look for General Tax Information, Sales and Use under the Business tab.



Planning for College

Do you have a high school student that is thinking about going to college? If so, my advice is to start early. The earlier the better.  

Currently, I have two in college. By no means am I an expert but I have learned a few things along the way (sometimes the hard way). Some of my trials may be helpful to those of you that are beginning this process. 

There are two aspects to college planning from my vantage point. The first is finding a school that is a good fit for your student and second how to pay for it. Professional college planners might tell you that these are one in the same but in our case they were certainly distinct.

Thinking about college planning the way I did, below are 5 things to consider when searching for a school.

  1. Begin early searching for schools your student maybe interested in and schedule campus visits. Most schools have virtual tours on their web site. This can give your student a glimpse of what the school is like which might rule out some schools and save wear and tear on everyone. It is important to remember that they are showing only the good stuff on the website. Another reason to begin early is that the more lengthy the selection criteria; the sooner this step should begin. For instance, my daughter’s number one criteria for a school was for a place to play basketball. After that she wanted to be within 2 hours of home, the college needed to be on the small size not more than 5,000 students, offered her major, and had the extra-curricular activities that she was interested in especially a football team. Once all of this was plugged in we were left with 15 or 20 schools in North and South Carolina and Virginia that could be possibilities. We began all this in her junior year (which about killed me) but should have started in her sophomore year at least. 
  2. Do not eliminate any school as a possibility at this point such as state school, private, in-state, or out-of-state, etc. There will be time to taper those dreams later. Professional college planning consultants, such as George Gately owner of Succeed Where It Counts, will confirm that the colleges’ selection criteria very from school to school and year to year. For instance, if a school has added a particular program or degree and need students to fill that discipline than a student looking for that program may be accepted over one with higher grades and/or better SAT scores with a different major. If your student fits what they are looking for scholarships opportunities are likely to open up for your student too.
  3.  Use online tools. Websites such as College Board, College Prowler, or College Foundation of North Carolina (CFNC) can help with searchers and reducing some of the application burden. In North Carolina, students are able to fill out a “universal application” on the CFNC website that they can then use to complete applications to various state schools. 
  4. Apply early. Most schools will accept an application in November without a firm commitment until May. Applying early can help with obtaining acceptance, priority placement for scholarships and/or housing. Most schools have early commitment which definitely moves the student up on the priority list. But as the name suggest, if the student commits he/she is locked in to that school. 
  5. Impress upon your student to apply themselves and become good citizens. This is almost impossible in their senior year but nothing is final from the college’s perspective until the final grades are recorded. I’ve known several students that were unable to attend the school they were accepted to at the beginning of their senior year because of how things turned out at the end of that year. Most schools are looking for students that are more than just good students. They want students that are good citizens as well. Encourage them to become active in clubs, church programs, or community service projects.  

 This is probably enough information to make a parents head swim and eyes to glaze over. Beginning early and laying out a plan of attack will certainly help make this task more manageable and less stressful.

 Next, time I will cover some information on paying for college. For now good luck in starting your plan.




Can We Talk?

The late Joan Rivers would use that question to begin a comedic dialog about something serious. It would bring roars of laughter as she used comedy to talk about a delicate topic. I am certainly not even close to a Joan Rivers but I doubt even she could find humor in this topic. 

Charleston 2



Recently, my daughter and I were visiting Charleston. One thing we made a point of doing was to pay our respects to the individuals that lost their life at the Emanuel AME Church. We were both very moved by the memorial that had accumulated there and the number of people who were still paying their respects. 




Charleston 3


While standing there my mind wondered back in time trying to understand how as a country we could still carry so much prejudice and hate. I was raised in the south but I can’t remember ever considering color. Even when desegregation of the schools began I was confused by the hostility. Yes, I knew all about the South’s history with its slavery, civil war, Sherman’s march to the sea, and carpetbaggers. But that was history. As a country we had learned from it and had moved on or so I thought. 


Charleston 1The town I lived in desegregated the teachers first. I remember my first African American teachers that came to our school. I had a history teacher that reminded me of Richard Prior. He was almost as entertaining and one of my favorites. He made history fun. Then there was the chemistry teacher whose afro was almost as high as he was tall. He ran around the room with enormous energy making smoke and blowing up stuff. I remember the African American students that came the following year and the fights in the hall. I remember the race riots in our town and a business that my best friend’s father owned, their only source of income, and how afraid they were that it was going to get burned down. 

My point with all of this is that I was raised in a time and place where I could have been taught to hate people of color but I wasn’t. Throughout my work career I have hired many people of color and paid them the wage that went along with that position. I didn’t raise my children to see color but people. 

I don’t believe I am unique with my beliefs or actions. However, all we hear from are those that carry hatred in their hearts. Where are all the others that don’t see color, any color, whether black or yellow or red or white? Where are the voices of the people that only see people? Isn’t it time we make a statement? By the looks of all those people who paid their respects at the Emanuel Church in Charleston there a many of us out there.  

When I graduated from college I was about one in eight female graduates in the entire business school graduating. I began my work career in what had been considered a man’s world. I can’t tell you the number of meetings I sat in where I was the only female in the room. I have had a taste of discrimination due to sex and it isn’t fun. For years I had to fight and claw my way up. I worked harder than my male counter parts for every promotion. 

There are many of us that have been discriminated against and hated for color or sex or religion or any number of other things. We are not famous but we fought the fight that needed to be fought on a daily basis. Where are you people? Isn’t it time that we are heard from too? Isn’t it time that America knows that there is more of us then the Dylann Roof’s of the world?

Deductions, Deductions, Deductions

Frequently, when I meet with new business owners they will get around to asking the question “What can I deduct”.  The short answer is any expense that is directly related to the business activity.  However, the official IRS answer is “An expense that is both ordinary and necessary to the business”. 

An ordinary expense is defined as one that is common and accepted by that industry. 

A necessary expense is one that is helpful and appropriate for that industry.  That cleared it up for everyone, didn’t it?!

 Most business owners understand that they can deduct the cost of any materials they are purchasing, supplies, rent, wages, advertising, small tools, postage, printing, etc.  What they are generally perplexed about are what are referred to as capital expenditures, personal money put into or spent for the business, vehicles, and meals and entertainment.  These expenditures do get a little more confusing and are sometimes looked at more closely by the IRS.  

Let’s take a look at these five. 

Capital Expenditures – Costly is a fuzzy term and can be a different amount for different companies.  However, for small businesses costly can be considered to begin around $1,000.  (For County Property Tax returns it is usually around $500.)  These are items that are more expensive than every day supplies and usually will last more than a year.  They can be things such as computers, desk, chairs, drills, saws, lifts, shelving, etc.  These types of expenditures are called capital expenditures.  They are not immediately expensed out but expensed out over their useful life through depreciation. 

Money Invested – Often, especially during a business start-up phase, a business owner will pull money out of his or her own pocket and purchase something for the business.  Or perhaps to open a bank account they might deposit personal funds into the business account.  In both of these cases the business owner has invested money into the company.  When or if the company pays back the owner is a return of that investment and not an expense.  This is true of loan repayments.  They are a return of borrowed money not an expense.  What the money purchased might have generated an expense but it depends on whether it fits the definition of an expense. 

Vehicles – Vehicles include work trucks and vans as well a passenger vehicles.  Many business owners want to buy a new expensive car and call it a company car.  However, in recent years the IRS has tagged company vehicles as an abused expense area and has begun to eliminate the advantages of this deduction.  Without getting into the lengthy details about personal vehicles here are five things to consider about company vehicles. 

  1. Only the portion that is used for business can be deducted. Traveling from home to the work place is considered commuting and is not deductible.
  2. A mileage log must be maintained in order for any deduction (actual expenses or a deduction based on mileage).
  3. Any employee driving a company vehicle should also be covered by workmen’s compensation.
  4. A company titled vehicle that is involved in an automobile accident could put the company at risk for a law suit which could devastate the company.
  5. The current mileage allowance is $0.575 per mile which is usually higher than actual costs especially for newer vehicles with low repair costs.

Meals and Entertainment – This expense is either abused or under utilized by small business owners.  There doesn’t seem to be a middle ground.  I have business owner who hardly claim any meals at all and those that go to Starbucks a couple of times a day and charge at least one meal a day to the business.  Neither of these extremes are appropriate.

The guidelines state:

  1. Ordinary and necessary expenses to entertain a client, customer, or employee are deductible if the expenses meet the directly-related test or the associated test.
  2. You cannot deduct expenses that are lavish or extravagant under the circumstances.
  3. Generally only 50% of your entertainment expenses will be deducted on the tax return.  

Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation, and/or meals provided to a customer or client

Directly-related test states that the entertainment took place in a clear business setting or the main purpose of entertainment was to actively conduct business and business was conducted during the entertainment period and their was more than a general expectation of getting income or some other specific business benefit from the activity. 

 Associated test states entertainment is associated with your trade or business and the entertainment is directly before or after a substantial business discussion. 

I’m of the opinion that it isn’t worth spending $100 on something I don’t really need to save $20 or even $30 in taxes.  The company is its own entity and not an extension of the business owner.  Cash is King in small businesses.  I’ve seen quite a few business go under because they did not protect the cash.  So, business owner be a Knight and protect the King! 

Embezzlement? That Can’t Happen to Us!

Recently, Lixil Group, the Japanese company that owns American Standard, reported a recent discovery of off-the-book loans from its German subsidiary.  (Is it surprisingly to anyone else that American Standard, the maker of toilets, sinks, and other bathroom fixtures is now a Japanese owned company?)  The discovery of these loans (which is probably a nice way of saying embezzled funds) resulted in the subsidiary’s chairman and his son to be dismissed.  The amount of the loss is about $532 million.    

This is being reported as an accounting scandal.  However, I’m wondering where management was in all of this and what kinds of internal controls were present.  When the top levels of management are involved and there is collusion (two or more acting together) it is much easier to circumvent the system.  

Fraud, embezzlement, and theft are not just happening in billion dollar companies but in our small businesses too.  Just a few years ago, one of our local businesses had an employee that was accused of embezzling $500,000 from the company.   In small businesses it is difficult to have a lot of checks and balances more commonly thought of as Internal Controls but it is possible to have some.  The first and last control should be the business owner. 

As small business owners we wear multiple hats.  We are the salesman, the marketing person, the technician, etc.  Therefore, when we hire an employee(s) we are so grateful to off load some of our daily tasks to someone else.  However, that doesn’t mean we can walk away from all responsibility.  Certain things should be reviewed and/or signed off on before letting them go through. 

Here are four things to consider which might help to reduce potential losses. 

  • Set the tone at the top. As owners, our actions, directives, and behavior should set an example of integrity and ethical values.
  • Establish and maintain appropriate oversight. Determine some key check points such as signing off on purchases or purchase orders, signing all checks, reviewing the bank statements, reviewing financial statements on a regular basis, etc. This will keep you in the loop of the daily transactions without bogging you down and add a layer of internal controls.
  • Identify areas or processes that put the company at risk. Look at the activities that happen in the company.       Determine how vulnerable the company might be and at the potential losses. Putting in procedures or controls will help mitigate any potential losses.
  • Stay in-tune with your employees.   Frequently, when an employee takes from his employer they are dealing with some issue. It could be personal finances or unspoken issues with the boss.       Establishing appropriate performance measures, incentives and rewards and reviewing progress and employee goals and desires could help in keeping things on track.

  • Don’t ever forget that you are the business owner.  It is your responsibility to ensure that all is well with the company.  Theodore Roosevelt said it best, “If you could kick the person in the pants responsible for most of your problems, you wouldn’t sit for a month.”  Anyone else need a cushion??


How Are Your Company Records?

Four Reason to Keep Good Records

 Some aspect of the accounting or financial reporting world has been part of my entire work career.  Some people have second careers about half way into their work life but not me.  It is what I know and most days what I am passionate about.  I have been in this field long enough to see it evolve from keeping records with ledger pads, pencils, and calculators to computerized systems and complex areas of specialties.  

Small business accounting is not as complex as some areas of accounting but it is no less important than if the accounting was for a major company like GM.  In this age of technology many small business owners give little attention to their accounting records and even less in what that information can/could tell them.  I have seen accounting records for small businesses to range from a pile of receipts that are only organized once a year in order to do the tax return, to someone, usually a spouse, trying to record information into some accounting software such as QuickBooks.  Usually if someone is doing the record keeping they normally do not understanding what they are doing and/or no one is looking at the information.  

Here are Four reasons why your company information should be kept current and what that information can tell you if done properly. 

  1. At a minimum, timely kept information would provide an accurate bank account balance. I have been amazed at the number of business accounts I have seen that do not even keep a paper check register balance up to date and end up paying thousands of dollars (not hundreds) in bank charges and overdraft fees. Bouncing checks and paying unnecessary late charges put a drag on limited cash resources and endangers the company’s credit.
  2. Accurate and appropriate recording of income and cost of goods (or services) will give insight into what is selling and costing. Matching up what it costs to produce or provide a particular item or service can provide a business owner with invaluable information. I’ve seen businesses almost go bankrupt until their income and expenses were properly matched up. But once matched up costly lines can either be dropped or prices increased to reflect the cost associated with each.
  3. Timely tax planning can save money. When accounting information is only complied once a year at tax time there is no way to anticipate the tax burden much less make any plans to avoid it. We will get a flurry of calls in December asking about buying stuff, usually vehicles. I’m not a fan of buying stuff just to be buying to avoid taxes. It makes no sense to me to strap the company with a $30,000 debt to save maybe $3,000 in taxes. But there is more to tax planning than just buying things. Timing of purchases, the company’s ability to continue, the future growth potential, and investment in retirement plans are just a few things to consider when thinking about taxes.
  4. Correct records help to avoid costly mistakes. Recently, we received a company’s accounting records to prepare the tax return. They were keeping the accounting records themselves. In cases like this I always do some checking to feel comfortable that the information is correct. While doing this I noticed somethings that looked odd to me. Therefore, I dug deeper. What I found was that some items were duplicated. If I had prepared the return with the information I was originally given the business owner would have paid tax on an additional $60,000 that wasn’t there. It took us longer and cost more to fix the records than if we had done the bookkeeping all year. 

As a small business owner myself I know how tight finances are at times.  There are places to be frugal.  Keeping the company’s financial information is not one of those places. The costs that can be avoided from good records and information that can help guide the business owner should more than outweigh the cost of keeping this information.           



2015 IRS Data Breaches

IRS Data Breaches

 When someone has come to me with several years of IRS issues and limited information for those years, I have suggested we begin by obtaining a transcript from the IRS.  These transcripts contain all the income information (things like W-2’s and 1099’s) that have been issued to an individual and reported to the IRS.  They also contain some deduction information such as mortgage interest which has been reported as well.  Lenders especially mortgage lenders will frequently request a transcript.  The purpose is to verify that the tax return submitted with the loan application is the one that was actually filed. 

In the past these requests had to be submitted to the IRS in writing, mailed in, and received by mail.  Within the past two years, the IRS has made these requests available via their website.  When applying for a transcript online, there are several questions that are asked to help verify the individual’s identity.  The questions were specific enough to the individual, frequently referred to as “out of the wallet questions”, that it would seem difficult for someone other than the individual to get past the security to obtain other identifying information.  These “out of the wallet questions” would pertain to addresses or employers from several years ago such as your first employer or a childhood residence. 

However, this week the IRS said Tuesday that the Get Transcript application had been hacked.  Approximately 104,000 taxpayers’ accounts were accessed out of 200,000 attempts to access this data.  This occurred from February to May.  They believe that “the criminals had to already have stolen Social Security numbers, names, addresses, and other personal identifiers available and then they had to have enough personal information for each taxpayer to be able to get through the personal-related questions” (Cohn, 2015). 

Since the criminals already had enough personal information identity theft was not the purpose of the hack.  The purpose is believed to obtain basic tax information in order to file better fraudulent tax returns and steal the refund.  While refund fraud is of concern the IRS is more concerned that personal information such as Social Security numbers and personal information is in the hands of criminals.  The individuals will receive a notice from the IRS advising them of this fact. 

What Can We All Do? 

As a tax preparer, we are attempting to get the word out about these data breaches.  

The IRS will be sending out letters to the affected taxpayers. 

Individuals should monitor their credit closely.  Using a credit monitoring service can help.  

Be aware of the information that is being posted on social media.  “The hackers apparently made use of data-mining and analysis technology to find information that could be entered into the IRS’s ‘Get Transcript’ app and get past the IRS’s filters.  They’re getting the information from other hacks, doing things like scraping social media” (Cohn, Tax Practice, 2015). 

Keep virus protection programs up to-date and insure that it monitors for malware that might be downloaded with other applications. 

Fortunately or unfortunately we can’t all fall off the grid and go back to only face-to-face dealings and cash.  Just as you would secure your wallet or purse when going out, consider how you secure your personal information when going out in public electronically.


Works Cited

Cohn, M. (2015, May 26). Accounting Technology. Retrieved from Accounting Today: http://www.accountingtoday.com/news/tax-practice/irs-detects-massive-data-breach-in-get-transcript-application-74709-1.html?utm_campaign=daily-may%2027%202015&utm_medium=email&utm_source=newsletter&ET=webcpa%3Ae4450341%3A2713542a%3A&st=email

Cohn, M. (2015, May 29). Tax Practice. Retrieved from Accounting Today: http://www.accountingtoday.com/news/tax-practice/irs-gets-better-at-detecting-identity-theft-74736-1.html?utm_campaign=daily-may%2029%202015&utm_medium=email&utm_source=newsletter&ET=webcpa%3Ae4465578%3A2713542a%3A&st=email

Beware of These Four Scams!

Recently, a North Carolina state trooper addressed my Rotary club and his topic addressed public safety in our area.  He particularly warned of several scams that are occurring locally.  They were rather disconcerting to me and I immediately thought they needed to be passed on to you.

  1. Beware of the door-to-door vacuum salesman. Local gangs have “hired” individuals to go door-to-door pretending to be vacuum salesmen. They are dressed nice, usually in suits, and have picture IDs. However, they are there just to scope out the place for their “employer”. Sometime later when the residences are out the scammers will return and rob the home.
  • Beware of calls from Microsoft. Residences are receiving calls from individuals stating that they are from Microsoft. These callers claim that the computer(s) in the home have a virus or malware and offer to fix it for them. They request the IP address for the computer. With this information, the caller is able to access the computer and steal all the information it contains which usually includes bank and credit card account information. In no time the bank accounts are drained. Several things to remember when receiving these types of “helpful” calls are:


    1. Companies’ such as Microsoft do not make telephone calls.
    2. A company that you do not currently have a service agreement with does not call and offer to provide that service especially for free.
    3. Legitimate companies would allow you to call them back to verify their existence and/or point you to a web site to obtain a customer service number.
  • Beware of roofers after a storm. Individuals pretending to be from a roofing company are offering to inspect your roof for storm damage, claim that there is storm damage, and that they can process the claim through your insurance company. They require a deposit upfront in order to proceed. Once the deposit is given the homeowner never sees the roofer again. There are many legitimate roofing companies in the area. If there is possible damage after a storm all of them will inspect for free and begin work after they have contacted the insurance company. Any deductible is paid by the homeowner once the project is completed. In these cases it is best to obtain a referral. We know several really good companies and would be happy to pass this along.
  • Beware of calls from the IRS. This scam is nationwide and its purpose is to steal peoples’ identity and refunds. Like Microsoft the IRS does not make telephone calls. They only send out letters and ask you to call them.  


Some would like to say that we live in a different world than our parents or grandparents.  It is currently more automated and the internet presents us with different challenges.  However, I remember my grandmother talking about the scammers during the great depression pretending to be hoboes and marking the houses they wanted to return to with “X’s”.

The rule of the day then and now is to be careful in your dealings and think before reacting to any unsolicited solicitation.  

Spring Has Sprung!!

Spring Has Sprung!!

Where Is Your Business Plan?


“Spring has sprung

The grass has rize

Wonder where the birds is”


That was one of my Grandmother’s rhymes, I think.  It was certainly one we would hear at least once every spring.  My Grandmother was a rhyming machine.  She could whip up a three or four line prose faster than anyone I’ve ever known.  One of her rhymes got her sent to her room when she was a child when she answered a dinner guest with one of her rhymes. 

Hearing my Grandmother say her “Spring has Sprung” rhyme in my head lead me to think about the plans that were made just a few months before at the beginning of the year.  Many of us make New Year’s Resolutions or set goals for things we would like to accomplish for the new year but after a few months and hectic lives we begin to lose sight of those goals.  Now with the beginning of spring and the awakening of the trees and plants; it is a great time to re-awaken those plans that were made just a few months ago. 

To help get back on track here are a four tips that might help. 

  1. Review your goals and make sure they are SMART – specific, measurable, attainable, realistic, and time-bound. If any of those pieces are missing, then the missing components should be added. Be sure that they are written down, too. I was a great proponent of having my goals in my head but Pat Heidrich, my sales coach, finally convinced me that I had to write them down. Once I gave into that step I began to accomplish so much more. Doing a little piece each day also helped me stay on track and get more done.
  2. Re-prioritize them and check the balance between work and pleasure. As circumstances change so does the need to accomplish certain things. One of my long range plans has been to learn how to sail. This year was the year I was going to take some classes and make this happen. However, family issues have arisen that make this now less important than spending more time with an ailing parent. Sailing can wait. 
  3. Review your time table. If it has been a month or two since you have worked on a specific goal, look to see if the time table you originally established is still viable. If not, make the necessary adjustments and get moving again!
  4.  Buddy Up. If you didn’t establish an accountability partner originally, find one now. They can be very helpful with encouraging you and keeping you motivated. This doesn’t have to be as formal as it sounds either. I have someone that I have lunch with each week. It is a firm commitment on both of our parts. Unless we are out of town or taking required continuing education we are both there. Over lunch we check up on each other and how we are doing with our plans. When I’m stuck my lunch buddy usually has some words of wisdom that get me moving again. 

Don’t lose heart.  Most of us get derailed from time to time from things we would like to accomplish.  The key is not to give up but to get up, dust things off, and get moving again.  Let this spring be a renewing, if need be, of not just the trees but of your goals as well.

The Woes of Tax Season

One would think that something that happens every year during the same time each year would become routine.  But the time from January 1st to April 15th, that which we call Tax Season, is never routine.  Each season takes on a flavor of its own each year. 

This year has been no exception.  The general public is probably unaware of all the different issues that are encountered each day.  Count your blessings.  As the deadline gets closer and closer and the issues tend to mount it becomes increasingly difficult to accomplish what the government has commanded us to do each year. 

This year we all have to deal with the Affordable Care Act with each tax return.  Extra questions and documentation has to go into each return whether insurance was bought on the exchange or through employment or individually.  There has been some push back when we have asked these questions which is understandable.  They are new and to me seem invasive.  However, they are required in order to complete a return.  Then there is the frustration from those that are getting penalized for not having insurance or underestimating their income and have to pay back some of the subsidy. 

Then a few weeks ago, TurboTax suspended access to their website due to fraudulent activity.  After about twenty-four hours it was back up and running again.  Several states stopped accepting returns from TurboTax users during this time.  In a news bulletin released today, the government has begun an inquiry into this situation.  Stealing people’s identity and their refund is becoming another security issue. 

In another news release, a new survey indicates that 70 percent of those surveyed were concerned about the “safety of their data when using desktop computers to file their state and federal tax forms” (Cohn, 2015).  With the increase in data security issues it is understandable that these concerns have increased over the years. 

At the risk of sound self-serving, data security is something that we are concerned about and attempt to be diligent at keeping current.  We have moved to a secure portal to transfer files when sensitive data is included.  Many banks and insurance companies use this same method.  The data that we transfer to state and federal agencies is encrypted.  Passwords are updated regularly and all computers have firewalls.  As we have seen from recent breaches with big retailers hackers can get into just about anything.  However, we will make it as difficult as we can for them.  

While these issues have been heightened with this tax season, there are those that do reoccur.  One of the most frustrating one for all of us pertains to those that express concern over the cost of a return especially when it is “so easy.  You just put the information into your computer.”  Very few returns we receive are easy.  Most have some sort of issue that needs to be considered when preparing the return.  Besides the actual preparation of the return there are multiple hours of education that occurs each year prior to tax season.  There are the data security issues that are considered and most times new processes or programs that have to be obtained, installed and learned.  And there are the multiple registrations and fees which are paid to be able to file returns.  

But it does boil down to the old joke about the locksmith.  I’m sure you know the one.  It goes:  A bank president locked his keys in the vault one day.  The bank president calls a locksmith to come open the vault.  The locksmith comes and in about 15 minutes he has the vault open and hands the bank president a bill for $500.  The bank president protested about the fee stating that he had only been there for 15 minutes.  He hands the bill back to the locksmith and says I need this itemized before I will pay this.  The locksmith takes the bill and writes on it $50 to drill hole and open the vault; $450 to know where to drill the hole.  

Got to love those locksmiths!      

 Works Cited

Cohn, M. (2015, March 9). Accounting Today. Retrieved from http://www.accountingtoday.com: http://www.accountingtoday.com/news/tax-practice/intuit-gets-us-government-inquiries-over-tax-filing-software-73893-1.html?zkPrintable=true